No Surprise-Japanese Automaker Mitsubishi Motors to End US Production
07-25-15, 09:39 AM
#1
No Surprise-Japanese Automaker Mitsubishi Motors to End US Production
Less than 1% of all US sales last year.
Japanese Automaker Mitsubishi Motors to End US Production
NORMAL, Ill. — Jul 24, 2015, 4:47 PM ET
By ALAN SCHER ZAGIER Associated Press
Mitsubishi Motors confirmed Friday that it plans to stop production at its only U.S. factory and sell the plant in central Illinois that has more than 1,200 workers.
The Japanese automaker reviewed its global supply chain and decided it was necessary to end production at the plant and find a buyer, said Dan Irvin, the company's North American spokesman. The announcement came after Japanese media reported the automaker had decided to end production in the U.S. to focus on Asian markets.
Irvin said Mitsubishi's board will soon make a formal decision on what will happen to the plant in Normal, Illinois, about 100 miles southwest of Chicago. Company officials hope to find a buyer that will maintain the factory's employment. The president of UAW Local 2488, Rod DeVary, said workers were told Friday that the plant will cease production on Nov. 30.
Annual production at the plant, which makes the Outlander SUV, has fallen to 64,000 vehicles from more than 200,000 in 2002. The company sold only 82,000 vehicles in the U.S. last year — less than 1 percent of the total market.
Japan's leading business newspaper, the Nikkei, reported that Mitsubishi would be the first major Japanese automaker to end production in both the U.S. and Europe. The company has built a plant in Thailand, bought one from Ford in the Philippines, and is building one in Indonesia.
Illinois state Sen. Bill Brady, whose district includes Normal, said he and other state officials were already working on a plan to find another manufacturer to buy the factory.
"We are going to do everything we can to make sure people know that Mitsubishi no longer needs the facility, but that this is a facility that has a very efficient, world-class workforce and a supplier network that's second to none," he said.
Brady also said he has talked to Mitsubishi officials have assured him that "Mitsubishi's effort to sell the plant "will not be about getting top dollar for the sale but about doing the right thing."
The plant is the only Japanese-owned auto factory with UAW representation. The union contract at the plant expires next month, with negotiations set to begin in earnest on Monday, said DeVary.
Both Brady and Normal Mayor Chris Koos stressed that Mitsubishi's decision was not about labor issues but because of dramatically falling sales. Brady said the hope now is that the closure of the plant, which had been not been used to capacity as sales fell, "may bring the opportunity to more fully use the capacity of the plant and bring more jobs."
State and local officials would not identify specific companies they plan to recruit, but said they would not limit their outreach efforts to automakers.
"We're confident that we will be able to attract a replacement company in relatively short order," Koos said.
One industry analyst said factors such as the location of the plant and its proximity to a network of suppliers for the Detroit automobile industry could make it attractive to another automaker. But Karl Brauer, a senior analyst for Kelley Blue Book, also said that given Mitsubishi's the financial straits over the past decade, he doubts the company has invested much in technology to bring the plant up to date.
Still, "it is a foundation, a footprint, and there is already a process in place to ship cars from (the plant) and components to it," he said, adding that another company might do as electronic car maker Tesla Motors did a few years ago when it retooled a shuttered plant in Fremont, California.
"They had to basically start from scratch and now it is a very vibrant plant," he said.
Japanese Automaker Mitsubishi Motors to End US Production
NORMAL, Ill. — Jul 24, 2015, 4:47 PM ET
By ALAN SCHER ZAGIER Associated Press
Mitsubishi Motors confirmed Friday that it plans to stop production at its only U.S. factory and sell the plant in central Illinois that has more than 1,200 workers.
The Japanese automaker reviewed its global supply chain and decided it was necessary to end production at the plant and find a buyer, said Dan Irvin, the company's North American spokesman. The announcement came after Japanese media reported the automaker had decided to end production in the U.S. to focus on Asian markets.
Irvin said Mitsubishi's board will soon make a formal decision on what will happen to the plant in Normal, Illinois, about 100 miles southwest of Chicago. Company officials hope to find a buyer that will maintain the factory's employment. The president of UAW Local 2488, Rod DeVary, said workers were told Friday that the plant will cease production on Nov. 30.
Annual production at the plant, which makes the Outlander SUV, has fallen to 64,000 vehicles from more than 200,000 in 2002. The company sold only 82,000 vehicles in the U.S. last year — less than 1 percent of the total market.
Japan's leading business newspaper, the Nikkei, reported that Mitsubishi would be the first major Japanese automaker to end production in both the U.S. and Europe. The company has built a plant in Thailand, bought one from Ford in the Philippines, and is building one in Indonesia.
Illinois state Sen. Bill Brady, whose district includes Normal, said he and other state officials were already working on a plan to find another manufacturer to buy the factory.
"We are going to do everything we can to make sure people know that Mitsubishi no longer needs the facility, but that this is a facility that has a very efficient, world-class workforce and a supplier network that's second to none," he said.
Brady also said he has talked to Mitsubishi officials have assured him that "Mitsubishi's effort to sell the plant "will not be about getting top dollar for the sale but about doing the right thing."
The plant is the only Japanese-owned auto factory with UAW representation. The union contract at the plant expires next month, with negotiations set to begin in earnest on Monday, said DeVary.
Both Brady and Normal Mayor Chris Koos stressed that Mitsubishi's decision was not about labor issues but because of dramatically falling sales. Brady said the hope now is that the closure of the plant, which had been not been used to capacity as sales fell, "may bring the opportunity to more fully use the capacity of the plant and bring more jobs."
State and local officials would not identify specific companies they plan to recruit, but said they would not limit their outreach efforts to automakers.
"We're confident that we will be able to attract a replacement company in relatively short order," Koos said.
One industry analyst said factors such as the location of the plant and its proximity to a network of suppliers for the Detroit automobile industry could make it attractive to another automaker. But Karl Brauer, a senior analyst for Kelley Blue Book, also said that given Mitsubishi's the financial straits over the past decade, he doubts the company has invested much in technology to bring the plant up to date.
Still, "it is a foundation, a footprint, and there is already a process in place to ship cars from (the plant) and components to it," he said, adding that another company might do as electronic car maker Tesla Motors did a few years ago when it retooled a shuttered plant in Fremont, California.
"They had to basically start from scratch and now it is a very vibrant plant," he said.
07-25-15, 09:51 AM
#2
Lexus Champion
That's a lot of jobs to loose in an area like this. Hopefully, someone will buy the facility quickly and save some jobs.
The Bloomington-Normal area, while not too big, is pretty prosperous overall, and is the home of the State Farm Insurance companies.
The Bloomington-Normal area, while not too big, is pretty prosperous overall, and is the home of the State Farm Insurance companies.
07-25-15, 07:46 PM
#3
Lexus Test Driver
Mitsubishi has been selling the ancient Lancer for far too long. That car wasn't competitive at launch and it's totally outclassed now. The Pajero doesn't sell well either and only the Outlander has decent sales in Europe. I'm not sad to see the demise of a terrible manufacturer.
07-25-15, 08:41 PM
#4
Lexus Fanatic
Doesn't surprise me one bit. Although todays vehicles from that plant are much better than those of the past, that plant has had a long history of poor quality control, labor/management issues, racial problems, sexual harassment, even civil suits. Add to that the serious lack of Mitsubishi dealerships across the country (you can't sell vehicles if you don't have retail-outlets), and, despite denials that the company itself is actually going to leave, I don't think it bodes well for Mitsubishi's future in the American market.
07-26-15, 01:32 AM
#5
Lexus Test Driver
I JUST mentioned this to my wife yesterday. Having seen a Mitsubishi car I said "you don't see those to often". Maybe I'm not looking out for them but I might see two a month?
07-26-15, 10:41 AM
#6
Lexus Fanatic
My first car was a Eclipse built in Normal Illinois which they referred to as the DSM plant. Back in the mid to late 90's Mitsubishi's were very popular, the Eclipse was probably the 2nd or 3rd most popular car with the import tuner crowd behind the civic and integra. It was a nice car, looked great, nice interior, performed well, interior was nicer and higher quality then civics and other imports, reliability was not that great after a couple years but I was a aggressive driver and did not maintain the car as best I should so some of it was my fault. Back then Mitsubishi's were generally seen as nice sporty alternatives to Honda's and Toyota's, they did not have the reliability of those cars but were still pretty competitive with a pretty solid lineup including the Gallant, Eclipse, 3000GT, Montero, Diamante.
With the 3rd Gen Eclipse everything went downhill quick. They turned it into a cruiser with a avg V6 and did away with the turbo and awd. They dropped the 3000GT. Gallant and Diamante became really downmarket uncompetitive cheapened rental specials which all played a part in killing off much of the import tuner market. The brand just fell apart and moved into the downmarket value segment which is never a good place to be. They brought the EVO over but it was not enough.
Instead of neutering their lineup they should have embraced their performance/sport tuner image and made the 3rd Gen Eclipse like the 1st and 2nd only with more performance, brought the FTO to the US from Japan plus the EVO and high performance versions of the Gallant, did a new version of the 3000GT, they would have remained relevant longer.
I hope they can do something about that plant for all those workers.
With the 3rd Gen Eclipse everything went downhill quick. They turned it into a cruiser with a avg V6 and did away with the turbo and awd. They dropped the 3000GT. Gallant and Diamante became really downmarket uncompetitive cheapened rental specials which all played a part in killing off much of the import tuner market. The brand just fell apart and moved into the downmarket value segment which is never a good place to be. They brought the EVO over but it was not enough.
Instead of neutering their lineup they should have embraced their performance/sport tuner image and made the 3rd Gen Eclipse like the 1st and 2nd only with more performance, brought the FTO to the US from Japan plus the EVO and high performance versions of the Gallant, did a new version of the 3000GT, they would have remained relevant longer.
I hope they can do something about that plant for all those workers.
07-26-15, 10:48 AM
#7
Lexus Champion
iTrader: (20)
im more surprised that they lasted this long. ugly cars, poor reliability , poor dealership experiences. previous GF brought her mitsu in for service and got a loaner for the day. the loaner broke down with barely 12k miles on it.
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07-26-15, 03:29 PM
#8
Lexus Fanatic
My first car was a Eclipse built in Normal Illinois which they referred to as the DSM plant. Back in the mid to late 90's Mitsubishi's were very popular, the Eclipse was probably the 2nd or 3rd most popular car with the import tuner crowd behind the civic and integra. It was a nice car, looked great, nice interior, performed well, interior was nicer and higher quality then civics and other imports, reliability was not that great after a couple years but I was a aggressive driver and did not maintain the car as best I should so some of it was my fault. Back then Mitsubishi's were generally seen as nice sporty alternatives to Honda's and Toyota's, they did not have the reliability of those cars but were still pretty competitive with a pretty solid lineup including the Gallant, Eclipse, 3000GT, Montero, Diamante.
With the 3rd Gen Eclipse everything went downhill quick. They turned it into a cruiser with a avg V6 and did away with the turbo and awd. They dropped the 3000GT. Gallant and Diamante became really downmarket uncompetitive cheapened rental specials which all played a part in killing off much of the import tuner market. The brand just fell apart and moved into the downmarket value segment which is never a good place to be. They brought the EVO over but it was not enough.
Instead of neutering their lineup they should have embraced their performance/sport tuner image and made the 3rd Gen Eclipse like the 1st and 2nd only with more performance, brought the FTO to the US from Japan plus the EVO and high performance versions of the Gallant, did a new version of the 3000GT, they would have remained relevant longer.
I hope they can do something about that plant for all those workers.
With the 3rd Gen Eclipse everything went downhill quick. They turned it into a cruiser with a avg V6 and did away with the turbo and awd. They dropped the 3000GT. Gallant and Diamante became really downmarket uncompetitive cheapened rental specials which all played a part in killing off much of the import tuner market. The brand just fell apart and moved into the downmarket value segment which is never a good place to be. They brought the EVO over but it was not enough.
Instead of neutering their lineup they should have embraced their performance/sport tuner image and made the 3rd Gen Eclipse like the 1st and 2nd only with more performance, brought the FTO to the US from Japan plus the EVO and high performance versions of the Gallant, did a new version of the 3000GT, they would have remained relevant longer.
I hope they can do something about that plant for all those workers.
07-26-15, 05:34 PM
#9
Lexus Fanatic
07-27-15, 05:22 AM
#10
I agree that what happened to the 3Gen Eclipse hurt the brand's image (and Mitsubishi's refusal to reverse that decision only made it worse), but quality, on average, (not necessarily with yours) had gone way down on the 2Gen AWD and turbo models. I not only reviewed and test-drove some of them, but also had some friends who owned them.
The reason they get a poor rap about reliability is the morons who drive the turbocharged models. They modify them(most of the time incorrectly/on the cheap) and turn up the boost, drive them aggressively, of course they're always going to be breaking stuff. Plus the ones that are still on the road are just plain old/lots of miles/neglected maintenance. They aren't like Corvettes, driven by old dudes as a 3rd car once a month, always maintained and detailed to the nth degree. The young 16-24 year old crowd is not kind to their cars for the most part.
07-27-15, 09:20 AM
#11
Lexus Fanatic
I agree that what happened to the 3Gen Eclipse hurt the brand's image (and Mitsubishi's refusal to reverse that decision only made it worse), but quality, on average, (not necessarily with yours) had gone way down on the 2Gen AWD and turbo models. I not only reviewed and test-drove some of them, but also had some friends who owned them.
3G Eclipse was further cheapened and not really fun anymore. 4G I thought was a improvement over the 3G but it was way too heavy and only fwd where the 350Z just came out with a good rwd chassis and power.
07-27-15, 09:29 AM
#12
Lexus Fanatic
I'd have to disagree with you entirely about the 2nd generation Eclipse. Compared to the 3rd gen model, it was built WAY tighter, nicer interior, better paint job, fewer rattles, etc.
The reason they get a poor rap about reliability is the morons who drive the turbocharged models. They modify them(most of the time incorrectly/on the cheap) and turn up the boost, drive them aggressively, of course they're always going to be breaking stuff. Plus the ones that are still on the road are just plain old/lots of miles/neglected maintenance. They aren't like Corvettes, driven by old dudes as a 3rd car once a month, always maintained and detailed to the nth degree. The young 16-24 year old crowd is not kind to their cars for the most part.
The reason they get a poor rap about reliability is the morons who drive the turbocharged models. They modify them(most of the time incorrectly/on the cheap) and turn up the boost, drive them aggressively, of course they're always going to be breaking stuff. Plus the ones that are still on the road are just plain old/lots of miles/neglected maintenance. They aren't like Corvettes, driven by old dudes as a 3rd car once a month, always maintained and detailed to the nth degree. The young 16-24 year old crowd is not kind to their cars for the most part.
I agree people abused over modded turbo models of the 1st and 2nd Gens which led to poor reliability but I had a NA 1st Gen that I did not modify and it still had some issues like overheating, very weak AC when hot out. I had to replace the engine and transmission in mine but I was aggressive with the car when I owned it and did not use top of the line fluids and got it maintained at local shops that I don't think knew what they were doing all the time/cut corners instead of getting it maintained at the dealership. When I sold it the transmission was on the verge of having more issues even though I was easier on the car.
07-27-15, 09:33 AM
#13
Lexus Test Driver
Just to be clear, they are ending production on their only North American plant, but will continue to sell Mitsubishi branded cars here?
This would be consistent with most Japanese makers that either sold out, closed or discontinued their joint venture plants in the US to focus on their own manufacturing capabilities, where ever they may be.
Their announcement and press releases were confusing though as they made it sound like they were shifting all their focus on the "Asian and emerging markets" instead of just manufacturing focus.
This would be consistent with most Japanese makers that either sold out, closed or discontinued their joint venture plants in the US to focus on their own manufacturing capabilities, where ever they may be.
Their announcement and press releases were confusing though as they made it sound like they were shifting all their focus on the "Asian and emerging markets" instead of just manufacturing focus.
07-27-15, 11:58 AM
#14
Lexus Fanatic
Originally Posted by Aron9000
I'd have to disagree with you entirely about the 2nd generation Eclipse. Compared to the 3rd gen model, it was built WAY tighter, nicer interior, better paint job, fewer rattles, etc.
The reason they get a poor rap about reliability is the morons who drive the turbocharged models. They modify them(most of the time incorrectly/on the cheap) and turn up the boost, drive them aggressively, of course they're always going to be breaking stuff.
The reason they get a poor rap about reliability is the morons who drive the turbocharged models. They modify them(most of the time incorrectly/on the cheap) and turn up the boost, drive them aggressively, of course they're always going to be breaking stuff.
You are right about the 2G Eclipse, quality did go down compared to the 1G especially in the interior but it was still a highly desired car and still better then most of the American junk cars in its segment at that time. I remember when I had my 1G Eclipse I test drove a 2G and noticed right away the interior had been cheapened a bit, less quality plastics, rattles, cheaper buttons, etc. 2G also had reliability issues but the 1G had its share too though still better then most US cars at the time.
3G Eclipse was further cheapened and not really fun anymore. 4G I thought was a improvement over the 3G but it was way too heavy and only fwd where the 350Z just came out with a good rwd chassis and power.
By then, of course, the Plymouth Laser and Eagle Talon versions were also out of production.
07-27-15, 01:29 PM
#15
Lexus Champion
iTrader: (20)
ive owned a 1997 eclipse gst and a 1998 eclipse gsx. interior was crap. i can think back and i remember panels didnt even fit right from factory. 1g interior was way tighter fight but ugly layout. 2nd gen had better layout but cheap plastics. my all black leather interior in the GSX was rare though and leather was still decent.
Both of those cars were reliable enough especially how hard i drove it every day. the GST suffered from crankwalk,. i miss those cars to be honest.
Both of those cars were reliable enough especially how hard i drove it every day. the GST suffered from crankwalk,. i miss those cars to be honest.